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After California physician Gil Mileikowskycomplained last year about poor oversight of thehealth care industry -- and of a


(THC) - Get Tenet Healthcare Corporation Report

hospitalin particular -- the state medical board showed signsof concern.

The board promptly faxed Mileikowsky a letterordering him to undergo drug and psychiatric testingto prove he wasn't impaired. The infuriated doctor, ateetotaler who graduated from medical school near thetop of his class, never complied. And he never backeddown from his original conviction that America'shealth care system is designed to overlook -- ratherthan catch -- serious abuses like those being exposedat Tenet's hospital in Redding, Calif.

By now, the medical board has threatened to revokeMileikowsky's medical license over the situation. Itgave

no reason for ordering thetests in the first place, citing confidentialityrules, but said such requests are "not unheard of."For his part, Mileikowsky claims he's the victim of aflawed oversight system that favors hospitals overphysicians who stand up for quality care.

"How do hospitals solve their problems?" he asked."They shoot the messenger. That will work until toomany messengers have been shot."

Mileikowsky counts himself among the victims ofTenet's alleged target practice. And he's pleased tosee the Senate finally returning fire.

Senate Finance Committee Chairman CharlesGrassley, known for his tough stance againsthealth care fraud, has already sent a stinging letterto Tenet criticizing the company's behavior anddemanding a truckload of documents. The IowaRepublican calls thecompany "ethically and morally corrupt." He refers toits history as "sordid." He points to lawsuitsdetailing "horror stories" of unnecessary -- andsometimes fatal -- heart surgeries. In short, he takessome pretty heavy swings at a company already on itsknees.

And the battle's still young. The powerfulsenator, feared by many in the health care industry, isjust now gathering ammunition and drafting somewell-placed soldiers for what could become a verypublic fight. He's given the company just a few weeks -- until Oct. 15 -- to supply information that, in the end, could lead to full-blown Senate hearings.

Some physicians have already warned the picture won't be pretty.

"Tenet has honed everything down to the fine artof making money," said Ralph Bard, a Tennessee surgeonwho lost privileges at a Tenet hospital where hefretted about patient care. "Tenet will do anything --anything -- to make a profit."

Tenet, which failed to answer questions for thisarticle, saw its shares rise 13 cents Tuesday to $15.11.

Pursed to Whistle

A decade has passed since Patrick Campbell's firstpatient died undergoing suspicious heart surgery atTenet's hospital in Redding.

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Campbell, an internist who was new to the area atthe time, referred the patient to rising surgery starChae Hyun Moon just to be on the safe side. Thepatient had mild symptoms that could indicate hearttrouble. Moon ordered an expensive heart bypass andvalve replacement even though a fellow cardiologistsaw no reason for surgical intervention. The patient,hit by a blood clot and kidney failure after theprocedures, died a week later.

Campbell started gathering evidence, eventuallyturned over to the FBI, as the years went by. Helearned of other questionable surgeries -- some justas tragic -- and even shared his concern with hospitaladministrators who seemed oddly aloof. In 1999, hefinally contacted an attorney who declined tointervene after being stonewalled by area authorities.

"As your objective and very experienced legaladviser, I set the information aside for a while, cameback and once again reviewed this situation," theattorney wrote. "The conclusion is inescapable: Do notblow any whistle! Period."

The attorney determined that the stakes weresimply too high for Campbell to act at that time.

"Best to pass on this one, swallow hard and waitpatiently for an unexpected event, which is sure tohappen sooner or later," he wrote.

Moon, together with heart surgeon FidelRealyvasquez, kept operating at such a feverish pacethat Redding -- a rural hospital in northernCalifornia -- became the most profitable in the entireTenet chain. And relatively healthy patients, Campbellfeared, continued to suffer or die.

Campbell compiled additional evidence and tried,with the same futility, to convince two other lawfirms to alert federal authorities through awhistleblower lawsuit. The FBI finally came knockingin the summer of 2002.

Discount Deal

Last month, the FBI sting culminated in a"record-breaking" $54 million fine against Redding forallegedly performing numerous unnecessary heartprocedures.

Campbell was stunned. His attorney, who calculatedRedding's exposure at more than $500 million, says thehospital got off the hook for just 12 cents on thedollar. And investors celebrated. The company's marketcapitalization surged by hundreds of millions ofdollars -- recouping the $54 million fine withinminutes -- on surprising news of the settlement.

Campbell ultimately concluded that under the deal,Redding was refunding baseline Medicare payments --but not the bonus "outlier" checks that made thesurgeries especially lucrative.

"The whole theory of

this case... is that they performed these radical, life-threatening, highlycomplex and expensive procedures on relatively healthypatients specifically for the purpose of collectingthe very generous outlier payments that were uniquelyapplicable to those procedures and that have beenexcluded from the settlement," Campbell's attorney,David Rude, wrote in an objection filed last month."Why settle now, and why settle for so little? This court,Dr. Campbell and -- most importantly -- the public areentitled to an answer to that question."

The Senate, unfettered by the secrecy of othergovernment arms, could soon blow the Redding mysterywide open. Already, Grassley has challenged theadequacy of the penalty -- just the latest in a longstring for Tenet -- and singled out the individualculprits he would like to see pay.

"The $54 million settlement, as well as Tenet'sfailure to acknowledge any liability or wrongdoing, isfurther evidence, in my opinion, that Tenet viewshealth care fraud settlements as the cost of doingbusiness with the federal government, while profitingat the expense of innocent victims and America'staxpayers," Grassley wrote in a letter to TenetCEO Trevor Fetter. "It is long past due thatTenet and its officers, directors and board members beheld accountable."

Foreign Exchange

Grassley first takes aim at the usual suspects.

He slams former CEO Jeffrey Barbakow for cashingin $111 million worth of stock options -- near theshares' peak -- before the price came crashing down.He casts similar disapproval on Thomas Mackey, theousted operating chief who allegedly orchestratedTenet's Medicare games, for profiting from well-timedstock sales as well. And he blasts Christi Sulzbach,who also sold stock, for holding the dual roles ofgeneral counsel and chief compliance officer -- saying"it doesn't take a pig farmer in Iowa to smell thestench of conflict" -- as Tenet slid back intotrouble.

He is particularly tough on Tenet leaders whoremained in power throughout the company's last fallfrom grace and its apparently bogus redemption. He is,in fact, requesting documents preceding Tenet's lastmajor downfall -- when the company locked juveniles inmental hospitals just to bilk their insurancecompanies -- from executives who rose in rank betweenthe two scandals. Besides targeting the top brass,he's seeking explanations from at least four ReddingCEOs and, just as notably, a regional boss who's beentied to trouble before.

More than 10 years have passed since Dennis Brown was first accused of rewarding foreign doctors for patient admissions. Brown, who currently oversees the northern California region that includes Redding, served as CEO of Tenet's Mount Elizabeth Hospital in Singapore atthe time. And Alan Ng, a gynecological surgeon, wascomplaining that Brown and his superiors wantedpromises of high patient admissions in return fordiscounted -- or even free -- office space.

"I told them if they went around offering doctorsincentives to increase hospital admissions, therewould be such a scandal that a public inquiry would beheld," Ng said in pre-trial documents. "I told themthat things were done differently here

thanin theUSA ... I said they could go to prison for this."

Tenet has long since exited the Singapore market,and Brown has continued to climb the corporate ladderin the U.S. His last rung before taking overthe northern California region? He presided overphysician services at a time when the company wasallegedly paying sky-high prices for physicianpractices in hopes of boosting referrals.

"If you pay a doctor more than is commerciallyreasonable, then you are in essence giving him akickback," said one former Tenet executive. "Is thatillegal? Gosh, I think so."

Holy Smoke

But Tenet has chosen a man of God -- a Jesuitpriest -- to keep the company in line.

Father Lawrence Biondi chairs Tenet's ethicscommittee and, following a recent internal shakeup,will be ultimately responsible for the company'scompliance program going forward. So far, Biondihasn't been the sort to promise doctors extra richesfor high patient admissions. Rather, he's taken theopposite approach at the Tenet-owned hospital on theuniversity campus where he serves as president.

"Being a physician in America usually means you'rewell paid, drive a nice car, enjoy the respect ofothers and sometimes have power over life and death,"the local

Riverfront Times

wrote in October2000. "At St. Louis University Hospital, it also meansyou could get a yearly 20% pay cut, every year, for aslong as you don't meet your quota. ...

Thequotausually involve

s seeing morepatients, performingmore procedures, or both, thereby producing morerevenue."

Biondi implemented the unpopular rule afterarranging to sell the Catholic hospital -- despiteconcerns from the Vatican -- to Tenet two yearsearlier. The university lost some of its topphysicians after the so-called performance supplementrule became public.

The hospital adopted the practice just monthsafter Tenet revealed that it had lost $100 million onphysician contracts nationally. But three years later,Tenet is still suspected of offering generouscontracts to some.

The Sequel

Grassley has asked Tenet to deliver two sets ofdocuments before it moves on to other -- much morevoluminous -- requests.

He wants an independent study of Redding's surgeryactivity conducted by the Mercer Consulting Group.Originally, Tenet promoted the investigation toreassure the public, but never released its results.

Then, Grassley wants copies of Tenet's contractswith the new doctors it has hired to revive Redding'scardiology program. He gives no reason for the demand.But knowledgeable sources have alleged that Tenetoffered Redding's new cardiology chief, SatyendraGiri, a multimillion-dollar contract that encourageshim to validate past heart surgeries at the hospital.

In the meantime, Tenet whistleblowers continue tosuffer. Charles Rosen, the former chief of surgery atTenet-owned Garden Grove Hospital in California,recently found his office in total disarray -- atarget of possible vandalism -- following a story by

that detailed his attempts toexpose the hospital and the watchdog agency thataccredits it. And Mileikowsky is still fighting anuphill battle to regain his privileges at anotherTenet-owned hospital in the state. The veteranfertility specialist lost his right to see patientsthere in late 2000, just months after agreeing totestify against two productive colleagues whoallegedly botched surgeries -- performed without priorconsent -- that needlessly left female patientswithout any fallopian tubes. He claimsthe hospital deemed him a "disruptive physician" anddrummed up 37 charges against him despite a virtuallyspotless record with his patients.

Mileikowsky says he has yet to get a fair hearing,due to an oversight system ruled by hospitals, and hasseen both state and federal medical associations cometo his defense. But he still has hope. He views theRedding scandal as a "very significant wake-up call"that might finally bring revolutionary changes to theindustry as a whole.

Those changes, he says, could finally reduce thehuge number of deaths -- estimated by some experts at100,000 annually -- caused by negligent, butprofitable, hospital care. For now, he says,patients will continue to fall victim to a flawedhealth care system that virtually guarantees humantragedies.

"Every single agency in this country that issupposed to monitor quality control in hospitals hassome defect that was purposely designed to prevent itfrom working," Mileikowsky said. "How many people havedied for no reason? Bin Laden couldn't cause this muchdamage if he wanted to."